Tut Upgrades Ace

LAKE OSWEGO, Ore. -- Tut Systems Inc. (Nasdaq: TUTS), an industry leader enabling the delivery of next-generation data and video services over broadband networks, today announced that Ace Communications Group contracted to upgrade its existing Astria(R) content processor video headend solution to the latest MPEG-4 AVC compression technology.

Tut Systems' Astria platform serves as the core video processing system for Ace's MPEG-2 digital headend. Ace will begin migrating its channel line up to MPEG-4 AVC in Q4 of this year. Tut Systems is providing comprehensive systems integration services, including design, project management, and testing of the state of the art digital headend. Today, Ace offers Ace Digital TV service to eight cities in southeast Minnesota -- Brownsville, Caledonia, Dakota, Eitzen, Hokah, Houston, La Crescent, and Rushford. In the very near future, they will also offer this service to the cities of Lanesboro and Peterson.

"As a member-owned cooperative formed after World War II, we have a long history of innovation and a strong focus on the needs of the local communities we serve," said David Schroeder, CEO of Ace Communications Group. "We view our decision to launch an advanced IPTV offering based on cutting-edge video compression technology from Tut Systems as the next step in providing ground- breaking services to our customers.

"We're pleased to have the confidence and support of a long standing customer with the technical acumen and business forethought of Ace Communications Group," said Bob Noonan, Vice President of Sales, Marketing, and Customer Service for Tut Systems. "We look forward to continuing a successful partnership with Ace as they enter the next phase of their IPTV business plan."

Tut Systems Inc. (Nasdaq: TUTS)